TaxTMI 
TaxTMI 
2017 (5) TMI 1051
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.... of M/s. Spencer International Hotels Ltd acquired by the assessee from M/s. Ceat Ltd would be allowed as deduction in computing the income from business of the assessee. For the purpose of ready reference the grounds of appeal raised by the revenue in both the assessment years in this regard are as follows :- ITA No.1906/Kol/2014 A.Y.2003-04 "1)That the ld. C1T(A) has erred in law and on facts by deleting the addition of Rs. 1,01,81,738/- on account of interest paid on acquisition of debentures though the business of the assessee was not investment in debentures for the year and those debentures were held by the assessee-company as its investment and not stock in trade. 2)That the appellant craves for leave to add, delete, amend or mo....
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....e held as business asset and profit and loss on sale of debentures would be offered for taxation as business income/loss. The payment of interest on unpaid purchase consideration was claimed as deduction while computing income from business. According to the AO the debentures in question were held as investment and therefore interest paid should be considered as part of the cost of debentures and should have been capitalized and cannot be claimed as deduction while computing income from business. The CIT(A) however came to the conclusion that though the debentures were held by the assessee as investment and was closely related to the commercial activity of the assessee's business of dealing in shares and securities. Therefore interest paid ....
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....curities and the assessee has also sold such debentures of Spencer International Hotels Ltd in earlier years are offered the same as business Income. We further find that in almost identical conclusions the Hon 'ble Supreme Court in the case of Bombay Steam Navigation Company Pvt Ltd. (supra) has held that 'the interest paid by the assessee was business expenditure and was allowable as a deduction under section 10(2) (xv). The transaction of acquisition of assets was closely related to the commencement and carrying on of the assessee's business and interest paid on the unpaid balance of the consideration for the assets acquired had, in the normal course to be regarded as expended for the purpose of the business which was carried....